In which type of contract are both parties obligated to fulfill their promises?

A bilateral contract is characterized by the mutual obligations of both parties involved. In such a contract, each party makes a promise to the other, meaning that both are bound to fulfill their respective commitments according to the terms set forth in the agreement. This creates a reciprocal relationship in which one party's promise is contingent upon the other party fulfilling their promise, making it essential that both parties adhere to their obligations.

In contrast, a unilateral contract involves only one party making a promise or undertaking an obligation, without any corresponding obligation from the other party until the promise is fulfilled or the action is completed. An express contract is one that is clearly stated, either in writing or verbally, but it does not inherently define the nature of obligations as being mutual. An executed contract refers to a contract that has been completely fulfilled or performed by both parties; while it may show that obligations were met, it does not speak directly to the mutual obligation at the outset. Hence, the distinction of mutual obligation in a bilateral contract is what makes it the correct choice in this context.